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RM 563.5 Million Saved From The Reduction In Road Tax And Freeze In Highway Toll Until 2007 Comprises Only 25% Of The More Than RM 2.3 Billion Extra Paid By The People From The 3 Fuel Price Increases.

Speech at Taman Teratai Dinner

by Lim Guan Eng  

(Taman Teratai, Sunday): The people only saved RM 563.5 million from the economic relief package, reducing road tax and the two year freeze in highway toll until 2007, announced by Prime Minister Datuk Abdullah Ahmad Badawi early this month to help the people face the impact of fuel price increases. This savings of RM 563.5 million is only 25% of the more than RM2.3 billion extra paid by the people from the 3 fuel price increases this year.

The RM563.5 million in savings comprises:

·        RM 544 million from reduction in road tax; and

·        RM 19.5 million compensation paid by the government to UEM Builders Bhd, the operator of Penang Bridge, to defer the increase in toll rates from RM7 to RM8.50 for two years.

All other toll operators are not affected by the Government's call to restrict toll hikes this year and next. The toll for PLUS Expressways Bhd's North South Expressway was increased in January this year while charges for its two other highways – New Klang Valley Expressway and Federal Highway Route Two (Subang-Klang) – are due for revision in January 2008.

Other toll operators, including MTD InfraPerdana Bhd, Gamuda Bhd, Lingkaran Trans Kota Holdings Bhd (Litrak), Road Builder (M) Holdings Bhd and Sunway Infrastructure Bhd, are not affected by the Government's latest announcement since their toll revisions are due only from 2007 onwards.

Clearly the government has not sacrificed or lost much revenue amounting to only RM 563.5 million from the reduction in road tax and freeze in toll hikes for two years as compared to the RM 2.3 billion extra paid by consumers following the 3 fuel price increases this year. How then can the government be considered to have helped the people when they only return RM 1 for every RM 4 extra paid for fuel price increases? 

Whilst DAP acknowledge the government can not continue to sustain oil subsidies of RM 16.8 billion at such high fuel prices, we must not forget that Petronas is a direct beneficiary from such high oil prices. Minister in the Prime Minister’s Department Datuk Mustapa Mohamad had stated that after the three fuel price increases this year to RM 1.28 per liter for diesel and RM 1.62 per liter for petrol, the government still has to bear taxes forgone and oil subsidies of RM 14.5 billion as compared to the previous RM 16.8 billion losses. In other words the fuel price increases represents a savings of a mere RM 2.3 billion.

What is RM 2.3 billion when compared to the RM 31.2 billion given to the government by Petronas in 2004, which is less than 10%? RM 2.3 billion is insignificant when compared with the profits of RM 35.5 billion earned by Petronas in 2004, after giving RM 31.2 billon to the government. DAP can not understand why the government can not afford less than 10% of the payments given by Petronas or why Petronas can not afford to bear less than 10% of its profits.

No one would object to a review or even a removal of oil subsidies provided that Petronas shares its huge profits earned from high oil prices with Malaysians. It is unfair for Malaysians to pay high prices for petrol when Petronas is able to enjoy huge profits. In 2005 alone, if Petronas gives every Malaysian RM 1,000 out of its RM 35.5 billion profits, Petronas would still has a remainder RM 10.5 billion.

Corruption, financial malpractices and abuse of power have eaten much of the RM 246 billion given by Petronas to the government since its formation 30 years ago. At the same time, Petronas can still earn RM 200.3 billion during the same period after giving RM 246 billion to the government. How have the people benefited directly from the RM 200.3 billion in net profits earned by Petronas? Or how has the combined earnings of Petronas of RM 446 billion being used by the government?

The government and Petronas must not forget that oil is a natural resource that does not belong to any one person but belongs to all 25 million Malaysians. It is unfair for the people to suffer fuel price increases whilst Petronas makes money.

There has been no concrete plan by the government to help the poor face rising fuel prices and inflation, which reached the highest level in 6 years at 3.7% in August 2005.   DAP hopes that this forthcoming 2006 Budget presented by the Prime Minister on 30 September can address the twin problems of high inflation and low economic growth that has affected the earnings of businessmen in Malaysia by allowing the people to share in the profits earned by Petronas.



* Lim Guan Eng, DAP Secretary-General

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